February 5, 2014
The New York Nonprofit Revitalization Act of 2013 introduces a set of policies that will affect nonprofit organizations incorporated in the State of New York and those that solicit charitable contributions in the state. The Act, signed into law by New York State Governor Andrew Cuomo late last year, delivers significant amendments to existing laws that concern nonprofits incorporated in New York. All affected nonprofit entities should review their policies and procedures to determine their level of compliance with the new law.
Below is our overview of some key requirements associated with audit filing requirements.
Amendments to Audit Filing Requirements / Role of Board or Audit Committee
Adjustments to the fiscal year gross revenue thresholds over the next several years will determine when nonprofits will be required to conduct a review or an audit, according to the information below:
|Effective Date||Unaudited Financial Report||Independent CPA Review||Independent CPA Audit|
|Through June 30, 2014||<$100,000||$100,000 – $250,000||>$250,000|
|July 1, 2014||<$250,000||$250,000 – $500,000||>$500,000|
|July 1, 2017||<$250,000||$250,000 – $750,000||>$750,000|
|July 1, 2021||<$250,000||$250,000 – $1 million||>$1 million|
The New York Nonprofit Revitalization Act also clarifies the roles and responsibilities of a nonprofit audit committee. Committees at tax-exempt entities whose revenues exceed $500,000 must oversee the accounting and financial reporting processes of the nonprofit and the financial statement audit, and annually retain and review an auditor.
The audit committees at nonprofits whose revenues exceed $1 million are responsible for even greater involvement including an annual consideration of the auditor’s performance, discussion of the material risks and weaknesses in internal controls, and others.
New Governance Requirements
Additionally, the New York Nonprofit Revitalization Act provides new governance requirements related to the following areas:
- Conflict of Interest Policies
- Related Party Transactions
- Whistleblower Policy
- Electronic Board and Member Activities
- Committee / Board Prohibitions
Alerts published by two legal services firms, Venable LLP and Perlman and Perlman, provide an additional level of detail regarding these requirements. We are happy to collaborate with your legal counsel in these areas.
Additional Regulations and Updates
Finally, the Act finally provides the following:
- Simplified merger procedures for nonprofits
- Simplified real estate transaction approval procedures
- Updated incorporation procedures
- New enforcement powers for the attorney general
This article was originally posted on February 5, 2014 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at email@example.com.